In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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DEMIRE Deutsche Mittelstand Real Estate AG (XTER:DMRE) achieved a remarkable letting volume, more than three times higher than in the first quarter of the previous year.
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The company successfully extended two maturing mortgage loans, strengthening its financial profile.
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Significant progress was made on the transaction side with the handover of two properties to new owners.
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The letting performance increased significantly to over 25,000 square meters in the first quarter.
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The company confirmed its guidance for rental income in 2025 to be in the range of 51 to 53 million and FFO1 to be between 3.5 to 5.5 million.
Negative Points
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Annualized contractual rent decreased to 53.7 million due to a major tenant leaving in February 2025.
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Rental income for Q1 was 14 million, which is 25% lower compared to the previous period.
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The vacancy rate increased to 18.1% due to tenants like Deutsche Telekom giving back a significant amount of space.
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FFO1 was reduced to 2.1 million due to declining rental income from a smaller portfolio.
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The company experienced a devaluation of 9 million from value adjustments in properties.
Q & A Highlights
Q: Can you provide an overview of DEMIRE's financial performance in Q1 2025? A: The CFO, Tim Bruckner, reported that rental income was 14 million, a 25% decrease from the previous period due to asset sales. The NOI margin stood at 64%, and FFO1 was 2.1 million, slightly above expectations. The net LTV remained stable at 41.5%, and the average cost of debt was around 4.3%.
Q: What were the key drivers behind the changes in rental income and vacancy rates? A: The CIO, Ralph Bonggas, explained that the decrease in rental income was due to the disposal of two smaller assets and increased vacancy in a larger asset. However, letting performance improved significantly, with over 25,000 square meters let, driven by contract extensions with Deutsche Telekom and a DIY market.
Q: How has DEMIRE's portfolio strategy evolved in Q1 2025? A: The company focused on opportunistic disposals of non-strategic and mature assets, selling two properties in Q1. This strategy aims to optimize the financial profile and reduce leverage, as highlighted by the CEO.
Q: What is the outlook for DEMIRE's financial performance for the rest of 2025? A: The CEO confirmed guidance for rental income between 51 to 53 million and FFO1 between 3.5 to 5.5 million. The company plans to continue deleveraging and improving operational performance.